Equity Option Strategies, why

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10 Options Strategies To Know

Traders often jump into trading options with little understanding of options strategies. There are many strategies available that limit risk and maximize return. With a little effort, traders can learn how to take advantage of the flexibility and power options offer. With this in mind, we’ve put together this primer, which should shorten the learning curve and point you in the right direction.

4 Options Strategies To Know

1. Covered Call

With calls, one strategy is simply to buy a naked call option. You can also structure a basic covered call or buy-write. This is a very popular strategy because it generates income and reduces some risk of being long stock alone. The trade-off is that you must be willing to sell your shares at a set price: the short strike price. To execute the strategy, you purchase the underlying stock as you normally would, and simultaneously write (or sell) a call option on those same shares.

In this example we are using a call option on a stock, which represents 100 shares of stock per call option. For every 100 shares of stock you buy, you simultaneously sell 1 call option against it. It is referred to as a covered call because in the event that a stock rockets higher in price, your short call is covered by the long stock position. Investors might use this strategy when they have a short-term position in the stock and a neutral opinion on its direction. They might be looking to generate income (through the sale of the call premium), or protect against a potential decline in the underlying stock’s value.

In the P&L graph above, notice how as the stock price increases, the negative P&L from the call is offset by the long shares position. Because you receive premium from selling the call, as the stock moves through the strike price to the upside, the premium you received allows you to effectively sell your stock at a higher level than the strike price (strike + premium received). The covered call’s P&L graph looks a lot like a short naked put’s P&L graph.

Covered Call

2. Married Put

In a married put strategy, an investor purchases an asset (in this example, shares of stock), and simultaneously purchases put options for an equivalent number of shares. The holder of a put option has the right to sell stock at the strike price. Each contract is worth 100 shares. The reason an investor would use this strategy is simply to protect their downside risk when holding a stock. This strategy functions just like an insurance policy, and establishes a price floor should the stock’s price fall sharply.

An example of a married put would be if an investor buys 100 shares of stock and buys one put option simultaneously. This strategy is appealing because an investor is protected to the downside should a negative event occur. At the same time, the investor would participate in all of the upside if the stock gains in value. The only downside to this strategy occurs if the stock does not fall, in which case the investor loses the premium paid for the put option.

In the P&L graph above, the dashed line is the long stock position. With the long put and long stock positions combined, you can see that as the stock price falls the losses are limited. Yet, the stock participates in upside above the premium spent on the put. The married put’s P&L graph looks similar to a long call’s P&L graph.

What’s a Married Put?

3. Bull Call Spread

In a bull call spread strategy, an investor will simultaneously buy calls at a specific strike price and sell the same number of calls at a higher strike price. Both call options will have the same expiration and underlying asset. This type of vertical spread strategy is often used when an investor is bullish on the underlying and expects a moderate rise in the price of the asset. The investor limits his/her upside on the trade, but reduces the net premium spent compared to buying a naked call option outright.

In the P&L graph above, you can see that this is a bullish strategy, so the trader needs the stock to increase in price in order to make a profit on the trade. The trade-off when putting on a bull call spread is that your upside is limited, while your premium spent is reduced. If outright calls are expensive, one way to offset the higher premium is by selling higher strike calls against them. This is how a bull call spread is constructed.

How To Manage A Bull Call Spread

4. Bear Put Spread

The bear put spread strategy is another form of vertical spread. In this strategy, the investor will simultaneously purchase put options at a specific strike price and sell the same number of puts at a lower strike price. Both options would be for the same underlying asset and have the same expiration date. This strategy is used when the trader is bearish and expects the underlying asset’s price to decline. It offers both limited losses and limited gains.

In the P&L graph above, you can see that this is a bearish strategy, so you need the stock to fall in order to profit. The trade-off when employing a bear put spread is that your upside is limited, but your premium spent is reduced. If outright puts are expensive, one way to offset the high premium is by selling lower strike puts against them. This is how a bear put spread is constructed.

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5. Protective Collar

A protective collar strategy is performed by purchasing an out-of-the-money put option and simultaneously writing an out-of-the-money call option for the same underlying asset and expiration. This strategy is often used by investors after a long position in a stock has experienced substantial gains. This options combination allows investors to have downside protection (long puts to lock in profits), while having the trade-off of potentially being obligated to sell shares at a higher price (selling higher = more profit than at current stock levels).

A simple example would be if an investor is long 100 shares of IBM at $50 and IBM has risen to $100 as of January 1 st . The investor could construct a protective collar by selling one IBM March 15 th 105 call and simultaneously buying one IBM March 95 put. The trader is protected below $95 until March 15 th , with the trade-off of potentially having the obligation to sell his/her shares at $105.

In the P&L graph above, you can see that the protective collar is a mix of a covered call and a long put. This is a neutral trade set-up, meaning that you are protected in the event of falling stock, but with the trade-off of having the potential obligation to sell your long stock at the short call strike. Again, though, the investor should be happy to do so, as they have already experienced gains in the underlying shares.

What is a Protective Collar?

6. Long Straddle

A long straddle options strategy is when an investor simultaneously purchases a call and put option on the same underlying asset, with the same strike price and expiration date. An investor will often use this strategy when he or she believes the price of the underlying asset will move significantly out of a range, but is unsure of which direction the move will take. This strategy allows the investor to have the opportunity for theoretically unlimited gains, while the maximum loss is limited only to the cost of both options contracts combined.

In the P&L graph above, notice how there are two breakeven points. This strategy becomes profitable when the stock makes a large move in one direction or the other. The investor doesn’t care which direction the stock moves, only that it is a greater move than the total premium the investor paid for the structure.

What’s a Long Straddle?

7. Long Strangle

In a long strangle options strategy, the investor purchases an out-of-the-money call option and an out-of-the-money put option simultaneously on the same underlying asset and expiration date. An investor who uses this strategy believes the underlying asset’s price will experience a very large movement, but is unsure of which direction the move will take.

This could, for example, be a wager on an earnings release for a company or an FDA event for a health care stock. Losses are limited to the costs (or premium spent) for both options. Strangles will almost always be less expensive than straddles because the options purchased are out of the money.

In the P&L graph above, notice how there are two breakeven points. This strategy becomes profitable when the stock makes a very large move in one direction or the other. Again, the investor doesn’t care which direction the stock moves, only that it is a greater move than the total premium the investor paid for the structure.

Strangle

8. Long Call Butterfly Spread

All of the strategies up to this point have required a combination of two different positions or contracts. In a long butterfly spread using call options, an investor will combine both a bull spread strategy and a bear spread strategy, and use three different strike prices. All options are for the same underlying asset and expiration date.

For example, a long butterfly spread can be constructed by purchasing one in-the-money call option at a lower strike price, while selling two at-the-money call options, and buying one out-of-the-money call option. A balanced butterfly spread will have the same wing widths. This example is called a “call fly” and results in a net debit. An investor would enter into a long butterfly call spread when they think the stock will not move much by expiration.

In the P&L graph above, notice how the maximum gain is made when the stock remains unchanged up until expiration (right at the ATM strike). The further away the stock moves from the ATM strikes, the greater the negative change in P&L. Maximum loss occurs when the stock settles at the lower strike or below, or if the stock settles at or above the higher strike call. This strategy has both limited upside and limited downside.

9. Iron Condor

An even more interesting strategy is the iron condor. In this strategy, the investor simultaneously holds a bull put spread and a bear call spread. The iron condor is constructed by selling one out-of-the-money put and buying one out-of-the-money put of a lower strike (bull put spread), and selling one out-of-the-money call and buying one out-of-the-money call of a higher strike (bear call spread). All options have the same expiration date and are on the same underlying asset. Typically, the put and call sides have the same spread width. This trading strategy earns a net premium on the structure and is designed to take advantage of a stock experiencing low volatility. Many traders like this trade for its perceived high probability of earning a small amount of premium.

In the P&L graph above, notice how the maximum gain is made when the stock remains in a relatively wide trading range, which would result in the investor earning the total net credit received when constructing the trade. The further away the stock moves through the short strikes (lower for the put, higher for the call), the greater the loss up to the maximum loss. Maximum loss is usually significantly higher than the maximum gain, which intuitively makes sense given that there is a higher probability of the structure finishing with a small gain.

10. Iron Butterfly

The final options strategy we will demonstrate is the iron butterfly. In this strategy, an investor will sell an at-the-money put and buy an out-of-the-money put, while also selling an at-the-money call and buying an out-of-the-money call. All options have the same expiration date and are on the same underlying asset. Although similar to a butterfly spread, this strategy differs because it uses both calls and puts, as opposed to one or the other.

This strategy essentially combines selling an at-the-money straddle and buying protective “wings.” You can also think of the construction as two spreads. It is common to have the same width for both spreads. The long out-of-the-money call protects against unlimited downside. The long out-of-the-money put protects against downside from the short put strike to zero. Profit and loss are both limited within a specific range, depending on the strike prices of the options used. Investors like this strategy for the income it generates and the higher probability of a small gain with a non-volatile stock.

In the P&L graph above, notice how the maximum gain is made when the stock remains at the at-the-money strikes of the call and put sold. The maximum gain is the total net premium received. Maximum loss occurs when the stock moves above the long call strike or below the long put strike. (For related reading, see “Best Online Stock Brokers for Options Trading 2020”)

Options Trading Strategies: A Guide for Beginners

Options are conditional derivative contracts that allow buyers of the contracts (option holders) to buy or sell a security at a chosen price. Option buyers are charged an amount called a “premium” by the sellers for such a right. Should market prices be unfavorable for option holders, they will let the option expire worthless, thus ensuring the losses are not higher than the premium. In contrast, option sellers (option writers) assume greater risk than the option buyers, which is why they demand this premium.

Options are divided into “call” and “put” options. With a call option, the buyer of the contract purchases the right to buy the underlying asset in the future at a predetermined price, called exercise price or strike price. With a put option, the buyer acquires the right to sell the underlying asset in the future at the predetermined price.

Why Trade Options Rather Than a Direct Asset?

There are some advantages to trading options. The Chicago Board of Options Exchange (CBOE) is the largest such exchange in the world, offering options on a wide variety of single stocks, ETFs and indexes. Traders can construct option strategies ranging from buying or selling a single option to very complex ones that involve multiple simultaneous option positions.

The following are basic option strategies for beginners.

Buying Calls (Long Call)

This is the preferred strategy for traders who:

  • Are “bullish” or confident on a particular stock, ETF or index and want to limit risk
  • Want to utilize leverage to take advantage of rising prices

Options are leveraged instruments, i.e., they allow traders to amplify the benefit by risking smaller amounts than would otherwise be required if trading the underlying asset itself. A standard option contract on a stock controls 100 shares of the underlying security.

Suppose a trader wants to invest $5,000 in Apple (AAPL), trading around $165 per share. With this amount, he or she can purchase 30 shares for $4,950. Suppose then that the price of the stock increases by 10% to $181.50 over the next month. Ignoring any brokerage, commission or transaction fees, the trader’s portfolio will rise to $5,445, leaving the trader with a net dollar return of $495, or 10% on the capital invested.

Now, let’s say a call option on the stock with a strike price of $165 that expires about a month from now costs $5.50 per share or $550 per contract. Given the trader’s available investment budget, he or she can buy nine options for a cost of $4,950. Because the option contract controls 100 shares, the trader is effectively making a deal on 900 shares. If the stock price increases 10% to $181.50 at expiration, the option will expire in the money and be worth $16.50 per share ($181.50-$165 strike), or $14,850 on 900 shares. That’s a net dollar return of $9,990, or 200% on the capital invested, a much larger return compared to trading the underlying asset directly. (For related reading, see “Should an Investor Hold or Exercise an Option?”)

Risk/Reward: The trader’s potential loss from a long call is limited to the premium paid. Potential profit is unlimited, as the option payoff will increase along with the underlying asset price until expiration, and there is theoretically no limit to how high it can go.

How and Why to Use a Covered Call Option Strategy

Ariel Skelley / Getty Images

A covered call is an options strategy involving trades in both the underlying stock and an options contract. The trader buys or owns the underlying stock or asset. They will then sell call options (the right to purchase the underlying asset, or shares of it) and then wait for the options contract to be exercised or to expire.

Exercising the Option Contract

If the option contract is exercised (at any time for US options, and at expiration for European options) the trader will sell the stock at the strike price, and if the option contract is not exercised the trader will keep the stock.

A put option is the option to sell the underlying asset, whereas a call option is the option to purchase the option. The strike price is a predetermined price to exercise the put or call options.

For a covered call, the call that is sold is typically out of the money (OTM), when an option’s strike price is higher than the market price of the underlying asset. This allows for profit to be made on both the option contract sale and the stock if the stock price stays below the strike price of the option.

If you believe the stock price is going to drop, but you still want to maintain your stock position, you can sell an in the money (ITM) call option, where the strike price of the underlying asset is lower than the market value.

When selling an ITM call option, you will receive a higher premium from the buyer of your call option, but the stock must fall below the ITM option strike price—otherwise, the buyer of your option will be entitled to receive your shares if the share price is above the option’s strike price at expiration (you then lose your share position). Covered call writing is typically used by investors and longer-term traders, and is used sparingly by day traders. 

How to Create a Covered Call Trade

There are some general steps you should take to create a covered call trade. 

  1. Purchase a stock, buying it only in lots of 100 shares.
  2. Sell a call contract for every 100 shares of stock you own. One call contract represents 100 shares of stock. If you own 500 shares of stock, you can sell up to 5 call contracts against that position. You can also sell less than 5 contracts, which means if the call options are exercised you won’t have to relinquish all of your stock position. In this example, if you sell 3 contracts, and the price is above the strike price at expiration (ITM), 300 of your shares will be called away (delivered if the buyer exercises the option), but you will still have 200 shares remaining.
  3. Wait for the call to be exercised or to expire. You are making money off the premium the buyer of the call option pays to you. If the premium is $0.10 per share, you make that full premium if the buyer holds the option until expiration and it is not exercised. You can buy back the option before expiration, but there is little reason to do so, and this isn’t usually part of the strategy.

Risks and Rewards of the Covered Call Options Strategy

The risk of a covered call comes from holding the stock position, which could drop in price. Your maximum loss occurs if the stock goes to zero. Therefore, you would calculate your maximum loss per share as:

Maximum Loss Per Share = Stock Entry Price – Option Premium Received

For example, if you buy a stock at $9, and receive a $0.10 option premium on your sold call, your maximum loss is $8.90 per share. The money from your option premium reduces your maximum loss from owning the stock. The option premium income comes at a cost though, as it also limits your upside on the stock. 

You can only profit on the stock up to the strike price of the options contracts you sold. Therefore, calculate your maximum profit as:

Maximum Profit = ( Strike Price – Stock Entry Price) + Option Premium Received

For example, if you buy a stock at $9, receive a $0.10 option premium from selling a $9.50 strike price call, then you maintain your stock position as long as the stock price stays below $9.50 at expiration. If the stock price moves to $10, you only profit up to $9.50, so your profit is $9.50 – $9.00 + $0.10 = $0.60.

If you sell an ITM call option, the underlying stock’s price will need to fall below the call’s strike price in order for you to maintain your shares. If this occurs, you will likely be facing a loss on your stock position, but you will still own your shares, and you will have received the premium to help offset the loss. 

Final Thoughts on the Covered Call Options Strategy

The main goal of the covered call is to collect income via option premiums by selling calls against a stock that you already own. Assuming the stock doesn’t move above the strike price, you collect the premium and maintain your stock position (which can still profit up to the strike price). 

Traders should factor in commissions when trading covered calls. If commissions erase a significant portion of the premium received—depending on your criteria—then it isn’t worthwhile to sell the option(s) or create a covered call.

Strategies for New Option Traders

When trading options, you can choose from a wide variety of strategies. The choice depends on just what you are trying to accomplish. Options are very versatile investment tools, and although most beginners feel that the only thing they want to accomplish is to “make money” there are other considerations.

How Do You Want to Use Options in Your Portfolio?

The primary goal for options traders is almost always making money. However, more experienced traders learn to appreciate that options can be used to obtain other desirable characteristics for their investment portfolios. For example, options can be used to:

  • Manage risk: This is the principal rationale that many investors have for trading options. Yes, you still seek to earn profits, but options allow you to go after those profits with less risk of losing money on the trade. In addition, the basic strategies allow you to establish a maximum possible loss for any trade — something that the investor who owns stock cannot always do (Even with a stop-loss order in place, on any given morning any stock can gap lower — far lower than the stop-loss price). Higher probability of earning a profit coupled with limited losses is something that most traders can appreciate.
  • Hedge, or reduce the risk of owning positions that are already in your portfolio: You can buy and or sell options that hedge existing positions. Some of these methods limit profits, while others do not. When a trader learns to understand how options work, it becomes easier to decide whether you prefer to pay cash (think of it as an insurance policy) for good portfolio protection or to collect a premium to accept only limited protection.
  • Protect your holdings against a huge stock-market surprise: They don’t occur very often, but we have seen some very volatile downside stock markets in our lifetime, and no doubt, there will be others.
  • Tweak stock market predictions: This one is especially important for experienced traders. For example, you may want to adopt a bullish position on a given stock or index, but options allow you to pinpoint your expectations. One example: You can maximize your profit potential by correctly predicting the size of the stocks price change.

Before You Start

A word of caution is in order. Rookies must understand one firm principle when trading: Never place money at risk unless you are certain that you understand exactly what you are doing. There is nothing inherently wrong with paying for advice, but you must do your part and be certain that the trade is suitable for your risk tolerance (see #5). Plus, if you do not understand what has to happen for the position to make money (and how it can lose money), then there is no reason to make the trade.

If you begin trading any options strategy without a firm understanding of how each of these strategies works and what you are trying to accomplish when using them, then it becomes impossible to manage the trade efficiently. in other words, when trading options you cannot adopt a buy and hold philosophy.

Options are designed to be traded, not necessarily actively, but when you make a trade, there is always an opportune time to exit. Hopefully with a profit, but a good risk manager (that’s you) knows when a specific trade is not working and that it is necessary to get out of the position. If you must take a loss, so be it. Never hold a losing trade hoping that it will get back to break even.

The following short list of strategies contains the methods that I recommend.

  • Covered call writing
  • Cash-secured sale of naked puts
  • Credit and debit spreads
  • Collars

For more sophisticated traders:

  • Iron Condors
  • Diagonal, and double diagonal spreads

These are six strategies recommended for options traders. There are other good strategies available, but these methods are that each is easy to understand. When getting started with options, it is advantageous to work with strategies that allow you to be confident that you know how to open, manage, and close your positions.

Covered Calls

At the top of the list is covered call writing (CCW). This is a wonderful way for rookies to learn all about options. Many option rookies already understand the stock market and have investing experience. Thus, beginning with an option strategy that includes stock ownership is a logical way to introduce investors to the world of stock options.

To implement this strategy, buy 100 shares (or more, in multiples of 100), or use shares you already own and sell one call option for every 100 shares.

When selling a call option, a cash premium is collected, and that money is yours to keep, no matter what happens in the future.

When you sell (write) a call option:

  • You become obligated to sell 100 shares of stock at a specific price, known as the strike price — for a limited time — but only when the option owner elects to exercise the option and you are assigned an exercise notice. That notice is simply a message from your broker telling you that your short option was exercised and that you automatically sold 100 shares at the strike price. Your option position has disappeared (once exercised, the option no longer exists) and the stock has been removed from your account. The cash will appear when the stock sale settles in three days.
    You, as the option seller, have no say about whether the option is exercised or not. That decision belongs to the option owner. If that does not seem fair, just remember that the buyer paid cash to obtain that right.
  • An option is a binding contract that describes the strike price and expiration date. The obligation to sell your shares lasts for a limited time — until the expiration date. If the option owner fails to exercise when that date arrives (the cutoff time is roughly 30 minutes after the market closes on expiration day), your obligation ends, and the call option expires worthless.
  • The cash (premium) that you collected when selling the option is not part of the contract. That premium only describes the trade that was made on the floor of one of the option exchanges.

When you write a covered call, there are only two possible outcomes. Either way, you should be pleased.

  • The call is exercised, and the stock is sold at the price that you agreed upon in the contract (the strike price). In addition, you get to keep the cash premium.
  • The option expires worthless. You are ahead of the game by the cash premium collected. You still own the stock and may — if you so choose — write another call option and collect another premium.

There is much more to learn about this strategy, but this should suffice for the purposes of a basic introductory discussion. If it sounds appealing, then it is time to begin learning much more about the details of how to implement covered or writing. Don’t jump into action by making a few trades. If CCW is unappealing, then consider another strategy from the list.

Naked Puts

When you sell an out-of-the-money (i.e., the stock price is higher than the put strike price), a cash premium is collected. That cash is yours to keep, no matter what else happens. There are two possible outcomes of this trade:

  • The option expires worthless (the stock price is above the strike price), and your profit is the cash collected.
  • When expiration arrives, the stock price is below the strike price. That means the option owner will exercise his rights to sell 100 shares of stock at the strike price, and you are obligated to buy those shares. The transaction is made automatically, just as when you are assigned an exercise notice on the call you sold when writing covered calls.

When selling the put option, you were willing to buy stock at the strike. If and when you are assigned an exercise notice, you may no longer want to own the stock. But look at it this way: If you had bought stock at its market price earlier (when you sold the put option instead), you would have paid a higher price, and you would not have collected the cash premium. So you may not be thrilled, (and can always sell the stock), but you are substantially better off than if you had bought stock instead of selling the put option.

Credit Spreads

Instead of selling unprotected (naked) options, the trader can sell one put and buy another. The put purchased acts as an insurance policy, limiting loss. It also reduces profit potential, but I urge you to believe that limiting losses is the key to your future success and that accepting smaller profits is a reasonable price to pay for being certain that you never incur a loss that is too large to handle. We all want to be positive thinkers, but winning traders know that the main objective is to prevent a monetary disaster. Loss limits accomplish that.

Although this is one of the most popular (for good reasons) option strategies, newer option traders should understand the basics of trading individual options before getting into spread trading. Why? Because it is easier to understand how a spread works when you know how its components work.

Collars

This is the most conservative of the strategies listed here. It is for people who are more interested in preserving their capital than in trying to earn a lot more money. The collar is a slightly bullish position with limited gains and limited losses.

Stock Options Can Generate Extra Income. Here’s How.

The thirst for yield in a world awash in low interest rates is leading investors to the options market—and that’s a great place to be.

They are increasingly embracing the cash-secured put sale strategy to create returns that generally far exceed what is available in the bond market. To create returns that can exceed 3% on their cash, these investors are increasingly selling puts on blue-chip stocks that pay dividends to create and enhance returns.

This is one of the simplest options strategies in existence. Investors simply identify stocks that pay dividends and then sell puts with strike prices below the stock’s price and with expiration dates usually of three months or less.

If the stock advances, investors keep the put premium, which often represents a return of more than 3% on idle cash. Should the stock price be below the put strike price at expiration, investors usually buy the stock (rather than cover the put) and allow themselves to be “put” a blue-chip dividend stock.

We have long advocated this strategy, and now it seems to have been embraced by major institutional investors, suggesting the strategy is poised to enter a golden age as investors confront negative interest rates, and extraordinary low rates.

In recent sessions, when the stock market seemed poised to suffer acute declines due to the pending impeachment proceedings against President Donald Trump, the cash-secured put sale strategy exploded in popularity. Rather than selling stocks, or even buying defensive puts to protect stocks, which is what one would normally expect during a sharp decline, some investors sold puts, often in very large sizes.

Among the key trades:

•In Procter & Gamble (PG), an investor sold 7,000 October $118 puts at 45 cents.

•In Clorox (CX), an investor sold 5,000 October $70 puts for at prices down to 29 cents.

•In BorgWarner (BWA), Investors sold 3,000 December $27.5 puts at 47 cents.

•In Kraft Heinz (KHC), investors sold 2,500 October $26.50 puts at 20 cents.

•In Ford Motor (F) investors sold 40,000 November $8 puts at $2.95.

•In McDonald’s (MCD), investors sold 20,000 January $190 puts at $2.75.

•In Walmart (WMT), investors sold 15,000 October $38 puts at 31 cents.

•In Symantec (SYMC), investors sold 10,000 October $23 puts at 35 cents.

The size of the put sales was extraordinarily unusual.

Major investors—and that is the only type of investor who could afford to trade puts that represent tens of thousands of shares of stock—often just focus on buying stocks. They rarely sell large amounts of puts as a way to control equities. This reflects a historical mistrust of options, concerns about options liquidity, and a broad stock-centric bias that exists in the institutional money management industry. Those biases, however, have been eroding in recent years and they now seem poised fade as all investors are now increasingly confronting a world in which it is hard to generate meaningful investment yields without taking on significant risks.

The big put sale trades, which Chris Jacobsosn, a Susquehanna Financial Group strategist notified his clients about, should thus be viewed as a sign that the humble cash-secured put strategy is no longer a secret of well-heeled individual investors with the resources and smarts to determine their own outcomes.

Now, it seems the strategy is poised to grow in use and importance at a time of extraordinary singularity in the markets, economy and Washington.

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